Some ways to get our ailing economy back on track

I want to suggest here some ways by which we can get out of hole the PLP has dug for Bermudians over the past decade.

Statistics from elsewhere in the world reckon that about 80 per cent of businesses fail within two years, and another 10-15 per cent with 5 years. The success rate is not high and indicates just how difficult it is to get a business operation off the ground.

Without labouring the point starting a new business, far less a new industry, is something that is done by people with unusual talents. It takes intelligence, original thought, risk taking, the ability to forecast the future, the desire to risk your life savings, the ability to organise, inspire others, and most of all the desire to work hard and for long hours.

Steve Jobs, who died in October, is an excellent example of a business entrepreneur.

So when one reads about Government spearheading some operation to find a new industry for Bermuda one has to smile. The list of characteristics mentioned in the previous paragraph are exactly those which are not found in political or bureaucratic circles.

Our two main industries, tourism and international business, were founded and encouraged by people with foresight and intelligence, and many of them were non Bermudian. Robert Clements, Bob Newhouse, Fred Reiss, David Graham (a lawyer), and Ernie Stempel of AIG played an enormous role in developing international business.

Modern tourism was largely the creation of the Furness Withy Line of England, Juan Trippe of Pan American Airlines or Don Gibson who did so much to promote local musical talent. 

Of course, there were many Bermudians who contributions were invaluable such as Sir Howard Trott and Hubert Smith in tourism, and Sir Henry Tucker, Sir James Pearman and William Kempe in international business.  The list is endless. They were unusual and talented people and Bermuda was lucky to have them. I only wish such talents abounded in Bermuda today.

Trusting government to solve an economic problem is like jumping over your own shadow. It cannot be done.

Here is a short list of solutions, but the chances of even one of them being implemented are practically nil because most them involve a minor or non-existent role for government and by extension a diminution of political power. Indeed, I would go further and say that unless government gets out of the way, there will be only a limited opportunity for us to get out our present predicament.

• Abolish the Department of Tourism – replace with independent tourist authority;
• Abolish the Department of Education – another total failure that has destroyed the future of too many Bermudians;
• Liberalise immigration policy and non-Bermudian ownership of real property.  Protectionism does not protect — it destroys;
• Grant Bermudian status to those with good character who have lived in Bermuda for 10 years.  We must be the only place in the world which makes it impossible for talented guest workers to belong;
• Introduce a balanced budget amendment — no exceptions;
• Reduce all ministerial salaries by 40 per cent 
• Limit payroll tax to 10% (5% employer, 5% employee). This is a tax on jobs;
• Convert public servant pension arrangements from defined benefit to defined contribution and raise the retirement age to 70 (60 for police and firemen);
• Allow those over 30 to opt out of social security. Change retirement age to 70 from 65. End senior benefits such as free land tax;
• Strengthen an independent public service commission – who must approve consultants’ contracts;
• Give 10 year residency certificates to non-Bermudians with assets greater than $2million.

The more free is an economy, the better it performs as was the case of the Bermuda of 20 years ago.  Economic freedom means low taxes, transparent administration, balanced budgets, light or no government debt, no favoured groups (like seniors), sound administration, and no corruption. When that happens, an economy prospers. When you have the opposite, then there is financial trouble and that is the position Bermuda finds itself in today.

To generate well-paid jobs for the future the choice is quite clear. Give up the current policies of economic destruction that are currently practised, and liberate Bermudian and foreign talent so that Bermuda can once again become a stellar economy.